Nanny

Providing nanny benefits is something that needs to be well thought out before your nanny is hired.  You have no legal obligation to provide your nanny with benefits, even if they are full time.

That being said, you should consider that doing so will give your nanny a sense of appreciation. Additionally, offering benefits will be an incentive to not only remain a loyal employee but to also put their best foot forward in terms of employment.

Think about it, how far would you go for a boss who doesn’t provide you much beneficially? It would probably be pretty easy to just call it quits without any notice. You would probably consider it from time to time anyway. But having an employer that shows support and care for your well-being by offering certain benefits would change that in a big way. People who feel appreciated will often go the extra mile.

When you are considering which benefits to offer your nanny, think about what you are asking of them. They will likely be driving to your house, you will always need to be able to reach them over the phone and they will probably be with your children through at least one meal period.

That’s a great place to start. Mileage reimbursement, a cell phone and meals can be provided for your nanny in order to help them meet your needs as well as theirs.

In addition to this, if you have a full time nanny, consider that they may not be getting health insurance elsewhere. It is common for an employer to offer health insurance to any full time employee after an agreed upon probationary period (typically 60-90 days). If you have a part time nanny, you could offer to cover a portion of their health insurance payment. More information on nanny health insurance here.

Employer taxes will also need to be dealt with. You have options here too. Many employers choose to pay their nanny’s portion of the taxes, but that is totally up to you. You can find more information on “Nanny Taxes” here.

Nannies are human too. Sick days and vacation can be expected and you may want to consider offering a certain number of paid days off or an allotted amount of PTO (paid time off).

According to HomeWork Solutions.com, a nanny can typically expect 5-15 days of PTO and 6 or more paid, federal holidays which should always include New Years, Memorial Day, 4^th of July, Labor Day, Thanksgiving and Christmas.

Lastly, consider rewarding your nanny for a job well done. If your nanny has been doing an exceptional job, a nice Christmas or annual bonus would go a long way in showing your appreciation.

Once you are no longer in need of a nanny, you will want to have a mutual agreement that upon suspension of services, benefits will be discontinued. This should be discussed before employment begins so that there isn’t any confusion when that time comes.

SOURCE: Flowing Springs Nannies

I had a nanny for several years and she was awesome. Having someone on payroll allowed me to work from home and start my career as a parenting expert. When my kids went off to school full time, I had to let our beloved nanny go, which was difficult because she was an integral part of our family.

But sometimes there is a blurry boundary between what nannies provide in a family and our roles and responsibilities as parents. Wonderfully loved and competent nannies are desirable, but it also means we are more likely to rely on them too much.

After all, the kids are having a good time and being looked after, while you’re able to go about your business. But without being aware, we can accidentally slide down a slippery slope until we are so dependent on our nannies that instead of providing much needed family help, we allow the presence of a nanny to deteriorate how healthy families should function.

So, to help you avoid this, here are six signs you have fallen into the nanny dependency rabbit hole:

You’re secretly jealous of the nanny

You may find yourself experiencing unpleasant feelings of jealousy because the nanny seems to be emotionally closer to your children and their friends and teachers than you are. You may begin to feel like an outsider to your own family.

This feeling, while understandable, is not healthy, so if you do feel jealous, ask yourself what can be done to get rid of these feelings in a healthy manner. It may be that you’re not spending as much time with the kids as you want to, and while this is perfectly normal and fine, it may mean that you should try to spend a bit more quality time with your little ones instead of relying on the nanny to be there all the time.

Your kids aren’t learning to be independent and responsible

If your school-aged children still expect someone to clear their plate from the table, or hang up their coats after they dump them on the floor, it could be that they are still reliant on the care their nanny provides.

Rather than letting this happen (after all, it’s not fair for the nanny nor for the kids), as parents we should be taking this time to educate them on managing their responsibilities on their own. We all want our kids to grow up to be self-sufficient and thoughtful.

You have to consult your nanny about everything

If you have to ask for a lot personal information about your children, like what they want for their birthday, if they like chocolate or vanilla cake, and who to invite to their party, you may be a bit too dependent on the nanny. These are questions a nanny should be asking you, not the other way around.

You’re debating hiring a second nanny for the baby that is due
Believe me — you do not need to have one nanny per child in the household. Unless you are royalty or Beyoncé, your children can absolutely share a nanny.

One of the most important lessons a child can learn is that when others are busy they need to be a team player and wait while other peoples’ needs are being met. This can easily be learnt when a child has to share a nanny with a sibling.

It’s time to re-think how much care our children really need and by whom.

You haven’t done a chore with a child in tow for a long time

When exactly was the last time you were inconvenienced by the presence of your kids and didn’t hand them off to the nanny? Let’s face it, doing the grocery shopping is faster without a kid in tow. Yes, it’s much easier to leave the kids behind and head out solo, however, we can’t ditch the kids for efficiency reasons every single time you need to be out and about.

You haven’t played with your child, had a meal with them, or been home for tuck-ins in a long time

If all your information about your kids has come from updates from the nanny instead of from actually making time to create a parent-child memory, this is a cause for concern and a sure sign of dependency.

SOURCE: The Huffington Post

According to Care.com’s 2017 Cost of Care Survey data, almost a third of American families say they spend 20% or more of their income on child care.

That’s an average of $18,000 a year, childcare advocacy group Child Care Aware reports.

A majority of working parents (63%) say they’ve made big career decisions like changing jobs or asking for flexible work arrangements to help alleviate some of the pressure.

Almost a quarter of surveyed parents (23%) said they either went part-time or became a stay-at-home parent to save money on child care. Of those who did this, 26% walked away from annual incomes of $50,000 or more.

But this last option is more costly than some parents might estimate.

Using the Center for American Progress’ interactive child care costs calculator, we can calculate how much it would cost the average American woman and the average American man to leave the workforce entirely to care for a new child:

If the average female worker in America (according to the BLS, she made about $39,000 annually in 2016) leaves the workforce at 26 (the average age American women have their first child) to care for her first child for five years until her child enters kindergarten, and if she plans to retire at 67 (Social Security’s full retirement age) with a retirement savings plan of 6.2% employee contribution and 4.7% employer contribution (which is about how much Vanguard participants contributed last year) …

… then she loses out on more than $635,000 in total income, which includes lost retirement assets and benefits, lost wages, and lost wage growth.

If the average male worker in America (according to the BLS, he made about $47,700 annually in 2016) leaves the workforce at 27 (the average age American men have their first child) to care for his first child for five years until his child enters kindergarten, and if he plans to retire at 67 (Social Security’s full retirement age) with a retirement savings plan of 6.2% employee contribution and 4.7% employer contribution (which is about how much Vanguard participants contributed last year) …

… then he loses out on more than $850,900 in total income, which includes lost retirement assets and benefits, lost wages, and lost wage growth.

While some families may prefer a stay-at-home parent for personal, non-financial reasons, in the long term, for parents who must make these kinds of career decisions based purely on their finances, leaving the workforce really isn’t an option.

American parents are coming up with all manner of other plans to cover childcare costs but are finding that few of them are full-proof.

While TIAA recommends that people put at least 20% of their income away into savings, the top three things families said they did to cover child care costs in 2015 were: save less money, stop saving money entirely, and save less for retirement, which, when you consider compounded interest, could also costs thousands down the line.

And while Care.com found that most — 72% — budget in advance for the cost of childcare, 30% of those parents admit to going over this budget. What’s more, nearly a third of parents (32%) say they face taking on new or further debt to pay for child care.

Many parents are dissatisfied with this state of affairs, and they’re looking outside the family for help.

A whopping 85% of parents say they wish their employer offered child care benefits like discounted child care and access to back up child care.

When asked how child care costs make them feel, 53% of the families surveyed by Care.com said American culture doesn’t do enough to support working parents, and 47% said they wish the US would take a note from other countries and subsidize child care.

SOURCE: Business Insider

The short answer is, yes, you must pay your nanny tax to comply with federal law. Here’s the long answer with more details.

According to the IRS, your Nanny is a household employee because you control what she works on (your children) and how she should take care of them (your daily instructions).  Also, you pay the Nanny, or an adult babysitter, more than a set amount (which the IRS usually changes) every year,

The IRS website states if you paid cash wages of $2,000 or more in 2016 you’ll need to play an employment tax (or Nanny Tax).  But if you paid cash wages of $1,000 or more in any calendar quarter of 2015 or 2016 you’ll need to pay an unemployment tax.  For more details, like how much of percent you’ll need to pay, see the IRS website here.

These rules also cover a housekeeper, gardener or other household workers who earn more than the threshold. So if you pay your child’s sitter $35 every week for Saturday night babysitting, you owe NannySocial Security and Medicare taxes.

It’s not complicated to pay Nanny taxes, but you do need to set aside some time to make sure you complete the forms correctly. I strongly advise you to pay Nanny taxes if you’re over the limit. Not only does it keep you right with the law, your contributions will increase your babysitter’s reported Medicare and Social Security pay.

Situations When You Don’t Have to Pay for Your Nanny Tax:

• If your nanny is employed by an agency or third party, who controls what work is done and how it is performed.
• If your child’s sitter provides care in her own home, she’s generally not your employee.
• If your child is cared for by your spouse.
• If your babysitter is a student under the age of 18. (If she’s not a student and babysitting is her principal occupation, you owe Nanny taxes.)
• If your parent cares for your child. (Exception: if you’re a single parent or your spouse is physically unable to care for your child, you likely owe taxes.)

Please note that you also may owe federal and state unemployment tax if you pay a household employee $1,000 or more in any calendar quarter. Contact your state tax agency (listed in an appendix to Internal Revenue Service Publication 926) to learn your unemployment tax obligations.

If you’re still confused, please consult your accountant, tax preparer, read IRS Publication 926, or call the IRS help line for household employers at 800-829-4933.  In the IRS paperwork, there is a checklist of paperwork and organizational tips you can follow to be sure that you and your Nanny are covered.

SOURCE: The Spruce

Don’t even think about making that hush-hush cash payment to your child’s nanny.

On average, families in the U.S. pay child care workers $556 each week — nearly $29,000 a year, according to Care.com. More than half of families report spending at least 10 percent of their household income on child care.

Though it’s easy to agree on a payment schedule with your nanny and hand him or her the cash, you’re risking a reprisal from the Internal Revenue Service. In extreme cases, you face the possibility of prison time.

You might remember the so-called Nannygate controversy back in the 1990s surrounding President Bill Clinton’s picks for attorney general, Zoe Baird and Judge Kimba M. Wood. Both women came under fire for the way they hired and paid their child care helpers. Baird, in particular, failed to pay Social Security taxes for her child’s care provider and her driver. Neither one got the attorney general job.

And now Andy Puzder, President Donald Trump’s nominee to run the Labor Department, stated that he and his wife had employed an undocumented housekeeper. The couple said they paid back taxes to the IRS and the state of California.

“If you’re paying someone to provide you with services, they have to report it as taxable income,” said Tim Steffen, director of financial planning at Robert W. Baird, a wealth management firm.

“If you don’t pay Social Security and Medicare taxes for your employees, you’re subject to penalties and fines,” he said. “It can be considered a felony if you don’t pay and this can lead to prison time if it’s egregious.”

Employee or Contractor?

Over the last 10 years, the IRS has received fewer returns showing employment taxes withheld for child care providers, cooks and other home workers.

Taxpayers must submit Schedule H if they paid at least $2,000 in wages annually to a household employee and withheld payroll taxes, including Social Security and Medicare levies, as well as federal income taxes. You’re also required to turn in this form if you paid wages of at least $1,000 in any quarter to all household employees.

You’ll also need to send this worker a W-2 with earnings, tax and withholding details, and you’ll have to send a W-3 to the Social Security Administration.

The deadline to send workers a W-2 for the 2016 tax year was January 31.

Employment status is key: You’re subject to these withholding and reporting requirements if your child care provider is your employee. That is, you control the work this person performs and how it’s done, according to the IRS.

Be Upfront

Since willful failure to pay employment taxes can be punishable with time behind bars, it’s imperative that you knock out the appropriate paperwork before you hire a household employee.

Get on the same page with your household worker in the interview process: Tell the prospective hire that the income will be reported to the IRS.

“Nannies are accustomed to being paid under the table,” said Susan Allen, senior manager for tax practice and ethics at the American Institute of Certified Public Accountants. “Explain that ‘This costs me more each year because I’m paying your extra share of Social Security taxes.‘”

Expect those responsibilities to inflate your costs by up to 15 percent, versus paying your nanny off the books, Allen said.

You’ll also need to register with your state as an employer, said Steffen.

File your Forms

Here’s what you need to get right with your employee and the IRS:

• Form I-9: This is used for verifying the identity and employment authorization of your worker. Your employee will need to provide documentation to prove his or her identity.
• Form W-4: A withholding allowance certificate that you’ll need from your employee if you withhold federal income taxes.
• Schedule H: You’ll turn in this form with your 1040 when you file your taxes. This will spell out how much you paid your employee(s) and the applicable unemployment, Social Security and Medicare taxes paid.

It’s also a good idea to have an employment contract with your employee so that you can address issues such as sick days, vacation time, and other details.

“I want people to go into it with the full knowledge and transparency of how this relationship works,” said Allen, who herself has hired nannies to care for her children. “Don’t go into this casually.”

Get Professional Help if You Need it

Don’t go it alone. You can hire an accountant to ensure you’re operating on the right side of the law.

Some payroll software providers also offer a home employee option that will allow you to withhold taxes and pay your nanny via direct deposit. Providers include HomePay and NannyPay.

“You’re managing a person,” said Allen. “This has its rewards and challenges.”

SOURCE: NBC News